2016 North Dakota Century Code Title 4 Agriculture Chapter 4-11.1 Potato Production Contracts
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CHAPTER 4-11.1
POTATO PRODUCTION CONTRACTS
4-11.1-01. Definitions.
In this chapter, unless the context or subject matter otherwise requires:
1. "Buyer" means a person, group of persons, organization, or entity that in the ordinary
course of business buys potatoes or potato byproducts grown in this state or who
contracts with a potato producer to grow potatoes in this state.
2. "Potatoes" means potatoes or potato byproducts produced for use in or as food, seed,
feed, or other byproducts of the farm for the same or similar use.
3. "Producer" means a person that produces or causes to be produced potatoes by
contracting with a buyer or processor to provide management, labor, machinery,
facilities, or any production input for the production of potatoes.
4-11.1-02. Unfair acts and practices prohibited.
A buyer may not engage in any of the following acts or practices, defined as unfair acts or
practices in connection with a potato production contract or purchase involving potatoes:
1. Use of coercion, intimidation, the threat of retaliation or the threat of contract
termination, cancellation, or nonrenewal to impose, demand, compel, or dictate terms,
payment or manner of payment, or the signing of a contract by a potato producer.
2. Use of coercion, intimidation, the threat of retaliation, or the threat of contract
termination, cancellation, or nonrenewal in order to require a producer to make capital
improvements such as buildings or equipment.
3. To interfere, restrain, or coerce a producer in the exercise of the right to join, form, or
assist a producer bargaining cooperative or association.
4. To refuse to deal with a producer because of the exercise of the right to join and
belong to a producer bargaining cooperative or association.
5. To refuse to provide to the producer, upon request, the statistical information and the
data used to determine compensation paid to the producer for settlement.
6. To refuse to allow a producer or the producer's designated representative to observe,
by actual observation at the time of weighing, the weights and measures used to
determine the producer's compensation at settlement.
7. To use the performance of any other producer to determine the settlement of a
producer.
8. To refuse to bargain with an established producer bargaining cooperative or
association formed for the purpose of negotiating contracts and agreements.
4-11.1-03. Civil liability for damages from violation.
A person who engages in an unfair act or practice as defined in this chapter is liable to a
producer for all damages caused to the producer by the unfair act or practice.
4-11.1-04. Good faith - Damages for violation - Penalty.
There is an implied promise of good faith, as defined in section 41-01-09, by all parties to a
potato production contract. In an action to recover damages, if the court or a jury finds that there
has been a violation of this provision, in addition to other damages authorized by law, attorney's
fees and court costs may be awarded.
4-11.1-05. Recapture of capital investment required by a potato production contract.
1. A contractor may not terminate or cancel a contract that requires a producer to make a
capital investment in buildings or equipment that cost one hundred thousand dollars or
more and have a useful life of five or more years until:
a. The producer has been given written notice of the intention to terminate or cancel
the contract at least one hundred eighty days before the effective date of the
termination or cancellation, or as provided in subsection 3; and
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b.
2.
3.
The producer has been reimbursed for damages incurred by an investment in
buildings or equipment that was made for the purpose of meeting minimum
requirements of the contract.
Except as provided in subsection 3, if a producer fails to comply with the provisions of
a contract that requires a capital investment subject to subsection 1, a contractor may
not terminate or cancel that contract until:
a. The contractor has given written notice with all the reasons for the termination or
cancellation at least ninety days before termination or cancellation, or as provided
in subsection 3; and
b. The recipient of the notice fails to correct the reasons stated for termination or
cancellation in the notice within sixty days of receipt of the notice.
The one hundred eighty-day notice period under subsection 1, and the ninety-day
notice period and the sixty-day notice period under subsection 2, are waived and the
contract may be canceled or terminated immediately if the alleged grounds for
termination or cancellation are:
a. Voluntary abandonment of the contract relationship by the producer; or
b. Conviction of the producer of an offense directly related to the business
conducted under the contract.
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